Congress has mostly stayed away from any attempt at copyright reform since the great SOPA blackout of 2012, afraid that anything will set off the public again. However, in 2013, Copyright Register Maria Pallante called on Congress to create the "next great copyright act" designed to update copyright for the 21st century. The House Judiciary Committee has been holding hearings and roundtables every few months since then, some of which have been more encouraging than others.
Copyright law is clearly broken and a true fix for the 21st century would be welcome. But what are the chances that Congress would actually do a good job, rather than make it worse? Well, we may soon find out. Yesterday, Rep. Bob Goodlatte put out a statement and a video claiming that they're finally ready to start releasing some proposals:
Goodlatte lists out a bunch of things that have been discussed, and then notes that he'll be focused initially on releasing proposals where he believes there is some "consensus":
In the weeks ahead, we will identify areas where there is a likelihood of potential consensus and circulate outlines of potential reforms in those areas. Then we will convene stakeholders for further work on these potential reforms.
And you have my personal commitment that as the review shifts to more focused work on potential reforms, the process will be transparent and the Committee will continue to ensure that all interested parties have the opportunity to weigh in on issues of concern to them. Our copyright system deserves no less.
The way that's put obviously sounds better than the way things have been done in the past, where the legacy industry basically wrote the bills for Congress, and our elected officials just put their names on it. But I'm still concerned with the framing of this whole thing. Goodlatte's talk continues to falsely suggest that copyright policy is about copyright holders vs. the public:
...it is critical that Congress understand the overall impact of any changes in copyright law before proceeding with formally introduced legislation. It is also clear that neither a solely copyright owner focused bill, nor a copyright user focused bill, could be enacted by Congress today, nor should they be.
But, again, as we've been explaining for years, thinking of copyright in such zero sum terms is the wrong way to go about it. A proper copyright system, focused on "promoting the progress of science" shouldn't put the best interests of either party at risk. These interests should be aligned. The public benefit of copyright should be to encourage creators to create and for that content to spread and be experienced. We should be looking at what kinds of policies best lead to that outcome. Instead, because of past history and the mental framework that the Judiciary Committee has had since the beginning, it seems that they want to set this up as a fight between Hollywood (representing "copyright holders") and the tech industry (which they're using as a weak and misleading proxy for "the public.") The actual public is not involved. Nor are many actual creators.
There are, of course, cynical political reasons for doing this. Congress learned years ago that if you want to get a big pile of donations, the best thing to do is to hint at a bill that would put two large industry in conflict with one another. Then both feel compelled to fund politicians campaign warchests.
But that leads to bad policy. It leads to policy based on the interests of funders and industry, rather than the public. Again, the purpose of copyright law is to benefit the public by creating incentives for content creators. The interests of content creators and the public should (and absolutely could) be aligned in all of this. Let's create systems that encourage the creation and distribution of content, without treating the public as criminals.
Let's hope that's actually what Goodlatte and the Judiciary Committee have in mind, but from the framing he has used so far, I'm concerned that what comes out of this is likely to be something else.
One of the reasons why many people are opposed to various "site blocking" laws, is that inevitably such things get abused. And while the US successfully stopped SOPA's site blocking plan, plenty of other countries went ahead and implemented something similar -- including, apparently, Portugal. Yet, earlier today, reports came out that the Portuguese site-blocking system was now blocking the website of an American video game development shop called Carbon Games.
Now, it does appear that someone just screwed up here. It's not happening on all Portuguese connections, but it did happen on multiple ISPs according to the initial report on Reddit. Also, it seems they only blocked the version of the website where the URL starts with "www." Get rid of that and people could access the website without a problem -- again adding to the likelihood of a general screwup. Oh yeah, also, it looks like if you use any other DNS provider, such as Google's DNS, you'd avoid the blocks (another reason why blocking at the DNS level is kind of stupid).
Either way, even if it was just a "mistake," the fact that it happened at all should be a huge concern. When entire websites can be blocked without any real review or due process, it opens the door to much more serious and widespread censorship. It's again troubling how quickly many in the copyright realm ignore the nature of this slippery slope.
Earlier this year, we were fairly concerned when a court ruled in favor of the RIAA in saying that Cloudflare had to automagically block any site that mentioned "Grooveshark" in the URL. Thankfully the court walked that back a bit, saying that the RIAA still had to inform Cloudflare of specific sites, but it still seemed problematic. The issue involved a few "fake" Grooveshark clones (sites pretending to be Grooveshark clones, but which actually were not). The RIAA can go after those sites directly, but the court's willingness to drag in a third party like Cloudflare was immediately problematic. That was a key part of SOPA -- the law that did not pass, yet judges keep pretending it did anyway.
Not surprisingly, whoever operated these sites ignored the lawsuit, leading to a default judgment in the RIAA's favor. That's to be expected when the defendants don't show up. But what's troubling is that the court keeps the injunction for Cloudflare in effect, basically letting the RIAA just designate any particular site as a Grooveshark clone, which Cloudflare then needs to dump within 48 hours. Even worse, if CloudFlare simply comes across a possible violation of the order by a customer, it has to proactively kick the site off its service. From the order:
IT IS FURTHER ORDERED that, in accordance with the terms of the Court's June 3, 2015 Order and its July 9, 2015 Order modifying same, CloudFlare is bound by this Order. Upon receipt notice from Plaintiffs or if CloudFlare otherwise has knowledge of an infringement or other violation of the Permanent Injunction on the part of one of its customers, CloudFlare shall cease providing its services to that customer as soon as possible, but no later than 48 hours after receiving such notice or obtaining such knowledge. CloudFlare may expeditiously notify its customers of any impending termination of their accounts as a result of this and related Court Orders.
This raises some fairly serious due process concerns. First off, Cloudflare certainly shouldn't be put in the position of determining what is and what is not infringing or violating this Court Order (in a case where it's not even a party). That puts tremendous burden on an unrelated party and it's a burden that almost certainly will pressure CloudFlare to kick sites off its service with nothing even close to resembling due process. Similarly it provides tremendous power to the RIAA to seriously damage website it doesn't like if they happen to use CloudFlare -- again with little to no due process.
That's not how the law is supposed to work. If there is infringing content, the DMCA allows the RIAA to file takedown notices, which have a clear process for notification and takedown of the infringing works. But what this order allows for is a vague standard, based on no clear law, to completely cut off services for a website, with no due process, no standard notification system and no clear appeals process.
As a default ruling in a district court this has basically no precedential value, but is quite worrisome nonetheless. Even if you believe that sites setting themselves up as Grooveshark clones deserve to be taken down, you should at least support basic due process before they can be killed off, right?
Last year, when the Sony emails leaked, and it was revealed that the MPAA was still totally focused on bringing SOPA back through alternative means, one of the strategies explored was getting the International Trade Commission (the ITC) to set up a sort of secret SOPA. The ITC is an already problematic government agency that is already widely abused by patent holders. Basically, you can ask the ITC to "block" some sort of "illegal foreign competition." And for patent holders, this has meant going to the ITC and claiming that a foreign firm (or a domestic firm that is importing products) is violating its patents, and thus the ITC should issue an injunction blocking any such products from entering the US at its borders. This is already troublesome in the patent context, because the ITC process is entirely separate from either the USPTO's review of patents or the federal courts -- and actually has different rules. So even if a court might decide that a patent is invalid under existing rules, the ITC may have already started blocking the import of products, claiming patent infringement. It basically allowed patent holders to get two bites at the apple (sometimes, quite literally at Apple).
The MPAA's theory was that if the ITC can block "infringing products" at the border, why can't it basically do the same thing for "infringing content." The goal of the strategy -- which even the MPAA's legal experts admitted was a long shot -- was to find a key case, in which "digital goods" of some sort went before the ITC, and see if it could get a ruling in its favor. It found that case in the ClearCorrect case, in which the company ClearCorrect faced off against the ITC over its 3D printing of clear plastic braces, custom-designed for each patients' teeth. While another company holds patents on a similar process, ClearCorrect tried to get around this by doing the computer work in Pakistan, and then sending the completed digital model back to the US to be printed. Thus, ClearCorrect argued, it was not violating the patents in the US and was just getting a digital file. The ITC ruled against ClearCorrect, and the company appealed the ITC's ruling out into the federal court system where the case was heard by the appeals court for the Federal Circuit (CAFC). The MPAA weighed in supporting the ITC, hoping to give teeth to the idea that the ITC can block "digital goods" at the border for "infringement." Thankfully, the good folks at Public Knowledge weighed in on the other side, noting what a massive and dangerous expansion of power this would be for the ITC in a very digital world.
Thankfully, today, the CAFC sided with ClearCorrect and against the ITC (and the MPAA), noting that the ITC has no jurisdiction to issue injunctions on digital products. The decision was written by CAFC chief judge, Sharon Prost (who has really shaken up CAFC in a good way since taking over last year). Prost correctly notes that the ITC's original decision was a massive, unauthorized expansion of the ITC's jurisdiction, without the necessary Congressional approval. In short:
The Commission’s decision to expand the scope of its
jurisdiction to include electronic transmissions of digital
data runs counter to the “unambiguously expressed intent
Prost notes that the ITC's charter allows it to issue injunctions to block the import of "articles" at the border, and "it is clear that 'articles' means 'material things,' whether when looking to the literal text or when read in context 'with a view to the term's place in the overall statutory scheme.'"
The judge notes that, while digital content has some sort of physical aspects, that does not make it the same thing as physical property:
We recognize, of course, that electronic transmissions
have some physical properties—for example an electron’s
invariant mass is a known quantity—but commonsense
dictates that there is a fundamental difference between
electronic transmissions and “material things.”
Going into more detail, Prost basically just reads the law:
The Commission’s jurisdiction to remedy unfair international
trade practices is limited to “unfair acts” involving
the importation of “articles.” 19 U.S.C. § 1337(a).
Thus, when there is no importation of “articles” there can
be no unfair act, and there is nothing for the Commission
to remedy. Here, the only purported “article” found to
have been imported was digital data that was transferred
electronically, i.e., not digital data on a physical medium
such as a compact disk or thumb drive. The Commission’s
April 3, 2014, majority opinion devotes twenty-one pages
of analysis to the question of whether “articles” encompasses
digital data and ultimately concludes that it does.
But Judge Prost notes that the ITC is just wrong about that. And then starts digging in deeper and deeper about how ridiculous the ITC was in trying to make this massive landgrab. She spends pages citing the dictionary (actually, multiple dictionaries) as to why the ITC is just wrong. And then moves on to point out that it's pretty clear what Congress meant and the ITC seems to have just decided for itself to try to expand its powers. It's a pretty thorough smackdown. After making it clear that the ITC clearly misread the statute, Prost then goes on (even though she doesn't have to) to smack down the ITC's interpretation as "unreasonable." Again, she returns to the dictionary and notes that it appears the ITC looked at it, and then decided to pretend it said something different.
The Commission’s analysis of dictionary definitions
evidences the irrationality of the Commission’s interpretation
of the term “article.” While the Commission ostensibly
analyzes various dictionary definitions, it fails to
adopt a definition consistent with any of the definitions it
references. For example, as discussed in the prior section,
the Commission turns to the 1924 edition of the Webster’s
dictionary for the definition of “article,” but rather than
adopt that definition it concludes that it will “embrace a
broader meaning that describes something that is traded
in commerce.” ... In other words,
it generates its own definition, unrelated to the definition
provided by the dictionary.
Furthermore, the Commission inexplicably cites to
several dictionaries in two footnotes that support “articles”
being defined as “material things,” but provides no
analysis as to why these dictionaries should not be considered.
Even worse, she notes that the ITC not only misread the legislative history on the Tariff Act, but appears to have simply cut out a key phrase that undermines its argument. Specifically:
The Commission’s Opinion cites the Senate
Report, S. Rep. 67-595, as authority for this conclusion
and then quotes it as follows:
The provision relating to unfair methods of competition
is broad enough to prevent every type and
form of unfair practice and is, therefore, a more
adequate protection to American industry than
any antidumping statute the country ever had.
However, the actual quote reads as follows:
The provision relating to unfair methods of competition
in the importation of goods is broad
enough to prevent every type and form of unfair
practice and is, therefore, a more adequate protection
to American industry than any antidumping
statute the country ever had.
.... The Commission’s
omission of the phrase, “in the importation of
goods” is highly misleading; not only was a key portion of
the quote omitted, but it was omitted without any indication
that there had been a deletion. Furthermore, while
we may agree that the quote, as incorrectly stated by the
Commission, would indicate a broad authority for the
Commission, the phrase “in the importation of goods”
clearly limits the Commission’s authority. And as we
discussed above, it limits it in such a way as to exclude
non-material things. Because the Commission uses this
misquote as its main evidence that the purpose of the act
was to cover all trade, independent of what form it takes,
the Commission’s conclusion regarding the purpose of the
Act is unreasonable.
Yeah, simply deleting the phrase that undermines your argument, without even putting in some "..." or something is pretty bad.
There's a concurring opinion from Judge Kathleen O'Malley that is also a good read, noting how ridiculous it is that the ITC magically thinks it has the right to regulate pretty much the entire internet, without any actual expertise or mandate from Congress:
The Commission has concluded that it has jurisdiction
over all incoming international Internet data transmissions.
It reaches this conclusion despite never having
purported to regulate Internet transmissions in the past,
despite no reference to data transmissions in the statute
under which it acts, despite an absence of expertise in
dealing with such transmissions, and despite the many
competing policy concerns implicated in any attempt to
regulate Internet transmissions. The Internet is “arguably
the most important innovation in communications in a
generation.”... If Congress intended for the Commission
to regulate one of the most important aspects of modernday
life, Congress surely would have said so expressly.....
Although the Commission’s jurisdiction over imported
physical goods is undeniable, it is very unlikely that
Congress would have delegated the regulation of the
Internet to the Commission, which has no expertise in
developing nuanced rules to ensure the Internet remains
an open platform for all.... Instead, the responsibility lies with Congress to decide
how best to address these new developments in technology.....
Indeed, Congress has enacted laws and debated bills
whose intent is to balance an interest in open access to
the Internet and the need to regulate potential abusers.... Not once in
these debates has Congress said or implied that it need
not concern itself with these issues because it had already
delegated the authority to do so to the Commission.
Good stuff. O'Malley is actually arguing that the majority decision doesn't even need to go through the whole "Chevron" test it does, about interpreting the law because it's so blatantly obvious that the ITC has no authority here, but if it must go through with that interpretation test, then she agrees with Judge Prost that the ITC is just wrong.
There is a dissent, from Judge Pauline Newman who basically says "well, the ITC regulates international commerce, and commerce today is digital, so it's all good."
The purpose of Section 337 to provide a facilitated
remedy against infringing imports is beyond dispute. The
panel majority’s removal of this remedy from a preeminent
form of today’s technology is a dramatic withdrawal
of existing rights, devoid of statutory support and
of far-reaching impact. The majority’s ruling, that digital
goods cannot be excluded under Section 337 because
digital goods are “intangible,” is incorrect.
Given all that, don't be surprised to see an attempt to appeal this to the Supreme Court (or en banc for CAFC). But, at least for now this is a good and important decision that wipes out one of the MPAA's secret plans to bring SOPA in through the back door. Kudos to Public Knowledge for focusing in on this case and making the case for keeping the internet open.
On Tuesday, the House Judiciary Committee held a hearing on what sounds like a boring topic: "International Data Flows: Promoting Digital Trade in the 21st Century." However, as we've discussed, this seemingly boring topic can have a profound impact on how the internet functions, and whether it remains a global platform for free expression -- or becomes a fragmented system used for widespread censorship, surveillance and control. In other words this is important.
The hearing was mostly pretty bland (as Congressional hearings tend to be), but at one point, Robert Atkinson, the President of the Information Technology and Innovation Foundation (ITIF) argued that the US should be encouraging global censorship if it's for sites like The Pirate Bay. You can watch the portion of the video below (it should start at the right moment, but if not, jump to 1 hour, 27 minutes and 40 seconds):
It starts with Rep. Jerry Nadler reading a question someone else clearly prepared for him, directed at Atkinson about how to handle situations in which different countries have different laws regarding free speech and content, and what that should mean for "data flows" across borders. In short, this is a question about "what should we do with countries who want to censor the internet -- and should we allow that sort of thing." Atkinson's answer is a bit rambling, but he basically starts off by saying that we'll never agree with some other countries on free speech and such... but then says no matter what, one thing we should all agree on is that it's good to censor sites like the Pirate Bay and the US should encourage such blatant censorship worldwide:
I think it's an untenable project that we would end up with "global harmony" on every single rule with regard to the internet. We're not going to be able to do that. And we're certainly not going to be able to do that with free speech. There are certain countries, particularly more traditional, religious countries that find pornography objectionable. We don't with our... or at least we have free speech, we may find it objectionable, but we allow it. We're not going to agree on that. And for certain things like that, countries are going to do that and I think we just have to be okay with that.
Another example is in Germany, you're not allowed to download a copy of Mein Kampf. In the US, we can. Again, we're not going to change the German view. I don't know if they're right or wrong. It doesn't make any difference.
Where we can and should, though, take action, is there are some things that are clearly illegal under the WTO framework for intellectual property, for example piracy and intellectual property theft can be prosecuted. So when countries engage in steps, for example, to block certain websites that are clear piracy sites -- like, for example, a web or a domain called "the pirate bay" that should be quite... you know we should be encouraging that. That's quite different than blocking, say, Facebook or something like that, or blocking some site just because you don't want competition.
Where to start? Well, how about I let Atkinson debunk Atkinson. In the question immediately preceding this one about blocking websites, Nadler had asked Atkinson about backdooring encryption. And there, Atkinson gave a much better answer, noting that it was a terrible idea (he's right!), but then notes:
If they try to mandate that, they're setting a dangerous precedent, for example, by letting the Chinese government do the exact same thing.
Uh. Yeah. And having the US government "encourage" censoring websites also sets a dangerous precedent by letting the Chinese government (and lots of other governments) point to the US as doing the same thing they do. But, as Atkinson and other copyright system supporters will undoubtedly scream, "that's different -- this is about copyright, not censorship." Yeah, well, you're not paying attention if you don't recognize how copyright is used for political censorship as well. Remember how Russia was using copyright law to intimidate its critics? What you might not remember is that when China first set up its massive online censorship system, known as the Great Firewall of China, one of its key justifications to the outside world was that it would be used to stop piracy online. And, of course, during the big SOPA/PIPA fight, the Chinese were laughing at those of us in America who whined about their Great Firewall, while we were debating a proposal to set up an identical system.
Of course, it's no surprise that Atkinson is making this argument. The organization he runs, ITIF, is frequently credited with first proposing the ideas behind SOPA in a white paper that came out right before the SOPA push. And ITIF famously argued in favor of SOPA by pointing to authoritarian countries who censor the internet as proof that SOPA wasn't that harmful. Yes, Atkinson's own firm suggested that the US should emulate China, Saudi Arabia, Iran, Syria and a number of other countries in censoring the internet. But, you know, "just for copyright."
And this doesn't even get to the issue of Atkinson's assured statement that certain sites are "clear piracy sites." Except, as we've noted over and over again, almost every great innovation around content delivery was decried as a "tool for piracy" originally. Radio, TV, cable TV, the photocopier, the VCR, the DVR, the mp3 player and YouTube and similar sites were all attacked as piracy tools originally. And yet every one of them actually opened up new and important arenas for content creation, distribution and monetization. What looks like a piracy tool in the early days often becomes a massive and legitimate business opportunity soon after (again: it was just four years after the MPAA's Jack Valenti declared VCR's the "Boston Strangler" to the film industry that home video revenues surpassed box office revenues).
Either way, what Atkinson was saying here is both shocking and dangerous. He's outright advocating a censorship regime based on his belief of what is and is not appropriate -- and suggesting that the US should "encourage" other countries to censor the web without legal due process, without consideration for innovation, because he has decided which sites are bad. At the end he says that blocking The Pirate Bay is not like blocking Facebook. Yet, there are many people who argue that Facebook is, similarly, a giant piracy site. Whose definition is right in that context? And the same question can be asked about YouTube. Viacom sued YouTube claiming that it was just as bad as the Pirate Bay. Would Atkinson support countries blocking all access to YouTube "under the WTO"?
There is a rather astounding level of cognitive dissonance that some people, such as Atkinson have, around issues related to copyright and censorship. They assume, incorrectly, that copyright is some magical fairy tale world where it's never used for censorship, and thus it's fine to block "bad sites" where people like Atkinson get to decide what is and what is not bad. But all he's doing is encouraging internet censorship, and giving massive amounts of cover to authoritarian regimes who want to censor the internet for all sorts of reasons. They can easily take Atkinson's claims that we must encourage censorship over copyright and either abuse copyright for that purpose, or even just twist it slightly to note "well, blocking infringement is important to the US, and we feel the same way about political unrest."
Atkinson's ITIF lost its battle for SOPA nearly four years ago. It shouldn't try to reintroduce the idea of a global platform for internet censorship today.
from the seems-like-an-issue-that-ought-to-be-looked-at dept
As you may have heard, earlier this week, the RIAA sued Aurous and its creator Andrew Sampson for creating an apparently easy to use software front-end for streaming music from some unauthorized repositories (mostly in Russia). For his part, Sampson insists that he just used some publicly available APIs and created a nice front end, without doing anything that is directly infringing himself. While I can understand those claims, the existing details and case law suggest that Sampson isn't going to fare very well in court. Given Sampson's own public statements, at the very least, the RIAA has made a fairly compelling case under the Grokster "inducement" theory. You can -- as I do -- think that "inducement" to copyright infringement is a ridiculous thing to be considered against the law, but that doesn't change the fact that it is, indeed, the law. Unless there are some as yet unknown details here, Sampson is likely going to have a hard time getting around the inducement claims.
So given all that, I fully expect that Sampson will lose the lawsuit (and lose easily) if the case gets that far. However, that doesn't mean that parts of the lawsuit aren't concerning. Of particular concern is what the RIAA is asking for in the lawsuit -- and what the judge appears to have granted. Specifically, in the lawsuit itself, the RIAA doesn't just ask for Aurous to be shut down, but also asks for all sorts of third parties to be restrained as well. Here's the list of things the RIAA asks the court to issue an order for:
(A) enjoining Defendants and all third parties with notice of the Order,
including any Web hosts, domain name registrars, domain name registries, or their
administrators, from facilitating access to any or all domain names, URLs, and websites
(including, without limitation, www.aurous.me) through which Defendants infringe
(B) requiring domain name registries and/or registrars holding or
listing Defendants’ domain names and websites (including, without limitation,
www.aurous.me) through which Defendants infringe Plaintiffs’ copyrights to: (a) disable
www.aurous.me and any related domain names specified by Plaintiffs through a registry
hold or otherwise, and to make them inactive and non-transferable, and (b) transfer
Defendants’ domain names to a registrar to be appointed by Plaintiffs to re-register the
domain names in Plaintiffs’ names and under Plaintiffs’ ownership;
(C) enjoining all third parties with notice of the Order from
maintaining, operating, or providing advertising, financial, technical, or other support to
Defendants and any other domain names, URLs or websites through which Defendants
infringe Plaintiffs’ copyrights, including without limitation www.aurous.me; and
(D) enjoining all third-party distributors of applications, toolbars, or
similar software with notice of the Order from distributing any applications, toolbars, or
similar software applications that interoperate with any domain names, URLs or websites
through which Defendants infringe Plaintiffs’ copyrights, including without limitation
This is problematic, to say the least. Remember, SOPA did not become law, and yet the main part of the original SOPA bill was to create just this sort of remedy, whereby copyright providers could get a court order to get third party companies to be barred from doing any business at all with a site deemed a "pirate" site. Yet, SOPA did not become the law and the RIAA is just pretending it is law in asking the court to block all of those third parties from providing any services to the site.
The RIAA also submitted a desired temporary restraining order, which the judge effectively rubber stamped, granting everything the RIAA asked for -- but rejecting the RIAA's request not to have to put up a bond over this. Instead, the judge ordered the RIAA to put up a tiny $5,000 bond in case a party was "wrongfully" enjoined. That temporary restraining order seems pretty broad as well:
... Defendants and their officers, agents, servants, employees,
attorneys, and all persons who in active concert or participation with each or any of them, or who
are aiding and abetting their conduct, are hereby RESTRAINED and ENJOINED until further
Order of this Court from infringing, or causing, enabling, facilitating, encouraging, promoting
and inducing or participating in the infringement of, any of Plaintiffs’ copyrights protected by
the Copyright Act, whether now in existence or hereafter created...
Of course, one might question what qualifies as "all persons who are in active concert or participation," but it still has the potential to be overbroad, and to pull in all sorts of third parties who are doing nothing more than providing basic services.
Again, none of this is to say that Aurous is legal or shouldn't be facing this lawsuit. But pulling in third parties here was exactly the kind of thing that Congress chose not to do when it did not pass SOPA, in the wake of overwhelming public sentiment against allowing these sorts of remedies.
So why is the RIAA simply acting like it got what it wanted with SOPA and asking the court to proceed accordingly?
The MPAA has been working on a number of tricks to find a SOPA through the backdoor in the last few months -- more on some of the many attempts coming soon -- but in one attempt, it's suddenly walking away. A few weeks ago, all of the major movie studios filed a lawsuit over the website MovieTube (actually a series of websites). While it may well be that MovieTube was involved in copyright infringement (and thus a lawsuit may be perfectly appropriate), the concerning part was that, as a part of the lawsuit, the studios were demanding a remedy that is not available by law: that anyone who provides any kind of service to MovieTube be forced to stop via a court injunction. This was the kind of tool that was a part of SOPA, which (you may recall) never became law. Among the requests in the lawsuit:
That the Registries and/or Registrars be required to transfer the domain names
associated with Defendants’ MovieTube Websites, or any subset of these domain names
specified by Plaintiffs, to a registrar to be appointed by Plaintiffs to re-register the domain names
in respective Plaintiffs’ names and under Plaintiffs’ respective ownership.
That content delivery networks and domain name server systems be required to
cease providing services to the MovieTube Websites and/or domains identified with the
MovieTube Websites and disable any access to caches they maintain for the MovieTube
Websites and destroy any caches they maintain for the MovieTube Websites.
That third parties providing services used in connection with any of the
MovieTube Websites and/or domain names for MovieTube Websites, including without
limitation, web hosting providers, cloud services providers, digital advertising service providers,
search-based online advertising services (such as through paid inclusion, paid search results,
sponsored search results, sponsored links, and Internet keyword advertising), domain name
registration privacy protection services, providers of social media services (e.g., Facebook and
Twitter), and user generated and online content services (e.g., YouTube, Flickr and Tumblr) be
required to cease or disable providing such services to (i) Defendants in relation to Infringing
Copies or infringement of Plaintiffs’ Marks; and/or (ii) any and all of the MovieTube
A few days later, the good folks at EFF reminded everyone that SOPA did not pass, and this attempt to require a SOPA-level block is not actually what the law allows. Of course, as we noted soon after the SOPA fight, it appeared that some courts were pretending SOPA did pass, mainly in a variety of lawsuits involving counterfeit goods (rather than copyright infringement). And the movie studios rely on that in their more detailed argument in favor of this broad censorship order on third parties who aren't even a part of this case:
Courts have granted similar interim relief directed to third-party service providers in
cases with similar facts. The first such case, The North Face Apparel Corp. v. Fujian Sharing
Import & Export Ltd. (“Fujian ”), 10-Civ-1630 (AKH) (S.D.N.Y.), was brought against
defendants in China selling counterfeit goods through the Internet directly to consumers in the
United States. In Fujian, the district court granted an ex parte temporary restraining order,
seizure order, asset restraining order, and domain-name transfer order, later continued by a
preliminary injunction order.
Of course, last week, a bunch of internet companies -- Google, Facebook, Tumblr, Twitter and Yahoo -- filed an amicus brief highlighting how ridiculous the widespread demand is:
Plaintiffs are asking the Court to grant a preliminary injunction not just against
the named Defendants, but also against a wide array of online service providers—from
search engines, to web hosts, to social networking services—and require them to “cease
providing services to the MovieTube Websites and Defendants[.]” None of those
providers is a party to this case, and Plaintiffs make no claim that any of them have
violated the law or play any direct role in the Defendants’ allegedly infringing activities.
Plaintiffs’ effort to bind the entire Internet to a sweeping preliminary injunction
is impermissible. It violates basic principles of due process and oversteps the bounds of
Federal Rule of Civil Procedure 65, which restricts injunctions to parties, their agents,
and those who actively participate in a party’s violations. The proposed order also
ignores the Digital Millennium Copyright Act (“DMCA”), which specifically limits the
injunctive relief that can be imposed on online service providers in copyright cases.
Even if Plaintiffs had named those providers as defendants and obtained a final
judgment against them, the DMCA would not permit the relief that Plaintiffs are asking
for at the outset of their case, where they have not even tried to claim that these
nonparties have acted unlawfully.
We represent Plaintiffs in the above-titled action. We write to inform the Court that after
Plaintiffs filed their Complaint (and presumably in response thereto), Defendants shut down their
infringing websites, and as of today, such websites remain offline. Plaintiffs are no longer
seeking preliminary injunctive relief at this time but will seek permanent relief as soon as
possible. Defendants’ time to answer or otherwise respond is August 19, 2015.
Moreover, because Plaintiffs have withdrawn their motion for preliminary injunctive
relief, the arguments offered by Amici Curiae... in opposition to that motion are
not ripe for consideration and are otherwise inapplicable. Accordingly, Plaintiffs have not
addressed them here. To the extent Amici are requesting what amounts to an advisory opinion,
such a request is improper and should not be entertained.
In short: we had hoped to quietly get a court to pretend SOPA existed so we could point to it as proof that this is perfectly reasonable... but the internet folks spotted it, so we'll just walk away quietly, and hope that next time, those darn internet companies, and those eagle-eyed lawyers at the EFF aren't so quick to spot our plan.
We've argued for quite a long time that treating "pirates" like criminals instead of potential customers is a massive mistake for a whole host of reasons. There's the futility of the legal game, for instance, as well as the possible public relations nightmare that going after the public, even the infringing public, can create. But the best reason to not treat infringers like criminals is because they're often the best actual customers of content out there as well. In study after study, it's shown that a person who engages in some infringement spends more total money on movies, music, and video games than someone who gets everything legit. Pirates, scurvy-laden bastards as they may be, happen to be the creative industries' best customers.
And it turns out it's no different in Australia, where a recent government study bore out the same conclusion: infringers spend more money on content than content-saints.
Consumers who flirt with the morally ambiguous line of content consumption spend more money, according to a survey released by the Australian Department of Communications. Over a three-month period among respondents aged 12 and over, the survey found that those who consumed a mixture of copyright-infringing and non-infringing content spent on average AU$200 on music, AU$118 on video games, AU$92 on movies, and AU$33 on TV content. Consumers who only consumed non-infringing content spent only AU$126 on music, AU$110 on video games, AU$67 on movies, and AU$22 on TV; whereas pure copyright-infringing content consumers spent a mere AU$88 on music, AU$24 on video games, AU$53 on movies, and AU$8 on TV content.
In every market, the sometimes-infringer spends more. In the case of music and movies, the delta between the occasional infringer and the all-legal consumer is huge, much larger than the delta between the all-legal and all-infringement consumers. Video games and television don't show the same delta, but even in those arenas the occasional infringers spent more than the saint. Why? How?
Well, because the occasional infringer infringes because they're a fan, a fan perfectly happy to spend money on scarce goods where spending that money makes complete sense.
However, the survey also found that the majority of spending on music and movies was not on the content items themselves.
"For both music and movies, the majority of the average spend was not from purchases of either digital or physical copies. In the case of music, this primarily consisted of concerts and gigs, and in the case of movies, this primarily consisted of going to the cinema," it said.
And since the advents of the VHS and cassette tapes, that's always been the case. Theaters are about experience and live music for great acts will always be in demand, even if bootleg tapes and pirated DVDs are in hefty supply, which they are. For the content itself, the survey respondents essentially indicated that the juice wasn't worth the squeeze.
A majority of survey respondents said that they would pay for a music subscription service that charged AU$5 per month, and AU$10 per month for a movie subscription service. Only 5 percent of respondents said that nothing would make them stop consuming copyright-infringing content.
In other words, the "everyone just wants everything for free" line the entertainment industries have been pimping for decades is bunk. Instead, the overwhelming majority of customers and potential customers want content on-demand at prices that make sense, in which case they're perfectly willing to fork over the money. And even when they feel the price doesn't make sense, they're still willing to fork over money for things they do value as fans -- even though they may have become fans through pirated content. Either way, the industries win. It's just a matter of how much they want to win. Hint: crying over infringers who spend the most money isn't the optimal response.
Frustratingly, this government study was released roughly a month after Australia passed its version of SOPA, largely at the behest of industry lobbyists armed to the teeth with industry numbers showing industry losses at the hands of these same dastardly pirates who are spending so much money on their products. It sure would have been nice if the government had managed to have access to their own data before passing such draconian legislation, rather than relying on the historically unreliable data from the entertainment industry.
As was widely expected after getting the greenlight to move forward with the bill, the Australian palirament has now approved its version of SOPA, allowing courts to issue censorship orders to block entire foreign websites outright, with no real recourse. The few Senators who pointed out how problematic this would be appear to have been totally ignored. Scott Ludlam pointed out that this approach was both lazy and dangerous while Senator David Leyonhjelm (from a different party than Ludlam) succinctly explained the problems with the bill:
He notes that it's "vaguely drafted and unlikely to achieve its aims." Furthermore, he notes that it "aims to protect rightsholders at everyone else's expense." As he points out, that's not what Parliament is supposed to be doing. He further highlights how ridiculous it is that Australia has no fair use -- and to pass stronger enforcement without fixing the problems of Australian copyright law hinders free expression and public use is really ridiculous.
Making matters worse, as Crikey points out, those pushing in favor of the bill were using industry supplied numbers on the economic "losses" of piracy that were so ridiculous as to be literally unbelievable, and yet no one really paid attention. Specifically, it attacks the claims made that piracy is costing the movie industry 6,000 jobs per year, which is pretty bizarre for an industry that only employs about 30,000. But, making matters even worse, the number of jobs in the industry... has been going up, not down:
In the last two years, movie and sound recording has employed, on average, 27,100. The two years before that, it employed on average 27,600. So, decline? Well, the two years before that — 2009-11 — was employment of 26,600. And over 2007-09 it was 25,200; between 2005 and 2007, some 24,700 worked in the industry.
Employment in that sector allegedly being smashed by piracy is increasing — not uniformly, but substantially. At the end of the 1990s (when George Lucas was making Star Wars here) the industry barely employed 20,000 people. In the mid-1990s, the sub-division employed 13,000 — less than half of its current level.
There's more in that report that highlights how the numbers supporters of the bill were using simply don't pass the simplest laugh test. But, alas, Hollywood still gets the last laugh, because the politicians passed it anyway. They'll quickly discover that it won't put a dent in any copyright infringement. Nor will it create new jobs in Australia -- except perhaps for VPN vendors. But there's a decent likelihood that it will lead to less innovation, fewer new services and perfectly legitimate sites getting blocked.
To be honest, the haste with which this bill has moved through the Australian Parliament is exactly how the entertainment industry expected the original SOPA to cruise through Congress. It was only because so many Americans spoke out against it that it was stopped. It's too bad that not enough Australians did the same Down Under.
Last December, we warned that Australia was about to get its own version of SOPA. The key aspects of the proposed law were exactly the parts of SOPA that so concerned millions of people in America: the ability of someone to make a copyright complaint that would force an ISP or other third parties to block entire websites with little to no due process. In March, just such a bill was introduced, pushed by Attorney General George Brandis, who refused to listen to consumer advocates and their concerns (though he met plenty of times with Hollywood reps). Also, more importantly, supporters of the bill did not conduct any sort of cost/benefit analysis to see if it was worthwhile.
And now, that bill has been given the green light to move forward after the Parliamentary committee reviewing the bill voted to move forward with it -- despite the lack of the cost/benefit analysis. From their recommendations, it appears that almost everyone on the committee has almost no clue about how this would work, the impact on free expression or the collateral damage created from blocking entire sites. Instead, it just takes for granted that "copyright infringement poses a
significant threat to the viability and success of Australia's creative industries" and thus something must be done! Even if that "something" won't solve the problem and will actually create many more problems.
In addressing the lacking cost/benefit analysis, the committee more or less shrugs its shoulders and says, well, how about we add a plan to review how well this is working two years down the road.
The only dissenting view was put forth by Senator Scott Ludlam, who spoke out clearly about the problems of Australia implementing its own SOPA:
The Copyright Amendment (Online Infringement) Bill 2015 is the latest in a
long line of misguided attempts by the government to monitor, control and censor the
The Bill will allocate a significant new censorship power to the Court that will
be used by copyright owners to block access to online content. However, there is a
substantial weight of evidence showing that it will be relatively easy to evade the
Bill's provisions, that it does not contain appropriate safeguards, and that it may result
in legitimate online sources being blocked.
Most importantly, there is also a significant weight of evidence showing that
the Bill will not meet its aims, as it does not address the underlying cause of online
copyright infringement: The continual refusal of offshore rights holders to make their
content available in a timely, convenient and affordable manner to Australians.
As we had mentioned, there had been some concern earlier this year that the vague terms in the bill -- specifically about "facilitating" infringement -- could lead to VPNs being banned. When asked about that, defenders of the bill kept giving non-committal answers about that not being the target -- and the committee report seems to accept that as fine, so long as there's some sort of notation with the bill saying that it's not intended to go after VPNs:
The committee acknowledges the evidence given by the Department of
Communications regarding VPNs but notes that the Bill does not explicitly
contemplate the introduction of injunctions against VPNs. The committee also notes
that VPNs are unlikely to meet the 'primary purpose test' in proposed
paragraphs 115A(1)(a)-(c). The committee would however be reassured if the
government were to clarify the status of VPNs in the Explanatory Memorandum to the
What's somewhat amazing to me is that a couple years ago, when it looked like Australia might actually introduce fair use into its copyright law, the copyright industry flipped out, arguing, in part, that because there wasn't a history of case law to rely on, it would lead to craziness while the courts sorted things out.
Yet, amazingly, when it comes to this sort of site blocking, it appears the copyright maximalists take the exact opposite stance: arguing that it's fine to let the courts flat out censor websites, because the courts will have lots of "discretion" to sort things out:
The committee takes the view that by providing the Court with a high level of
discretion the Bill would allow the Court to both target specific issues that arise in
individual cases and develop a general body of jurisprudence to provide more legal
certainty into the future. As the Bill would allow the Court to tailor an order to the
circumstances of a particular case, the committee expects that the Bill would
encourage the Court to draft orders in such a way so as to effectively deal with the
online copyright infringement but at the same time limit any unintended consequences
such as over-blocking or accidental blocking.
Yeah, because courts never get tripped up by this kind of stuff...
And of course, Australia should know damn well how poorly this kind of stuff works in practice, because after the Australian Securities and Investments Commission tried to block about 1,000 websites a couple years ago, it accidentally knocked a quarter of a million sites offline because no one understood that multiple sites could share the same IP address. And yet, these are the same people voting to move forward with this plan to let the government simply declare websites "bad" and cut them off.
Again, as we noted back in the SOPA days, nearly every new technology has been declared a major "facilitator" of "piracy" by the copyright industries before they figured out how to use them. This includes: radio, recorded music, television, cable television, the photocopier, the VCR, digital music, the DVR, the MP3 player, online video and online storage lockers. All of them. Under bills like SOPA or this Australian version of SOPA, the industry is allowed to effectively kill such innovations early, making it more difficult for the content industries to adapt and embrace these new services which time and time again have been shown to make the industry more money in the long run.
It is the ultimate ignorant and lazy response of Australian politicians to believe that they need to block new innovations because the copyright industry refuses to innovate or figure out ways to better serve the public. And, even worse, they seem to feel the only way to do so is in a way that censors large parts of the internet, puts tremendous costs on ISPs (to be passed on to consumers), and which will only serve to drive infringement further underground, rather than magically convincing people to give extra money to Hollywood.